Banca Mediolanum turns bankers into financial advisers

Italy’s Banca Mediolanum is aiming to add 100 advisers to its network through 2013, according to chief executive Massimo Doris.

Despite the crisis which has continued to curse the Italian economy, 2012 has been a very positive period for Banca Mediolanum.

The bank posted a net income of €351m, a 422% increase from the previous year, its best-ever result. Assets under administration reached €51,577m, an increase of 12% compared with December 2011. Net inflows were positive, at €2,258m and the bank had 1,040,000 customers at the end of December, with more than 707,000 bank accounts, including deposit, an increase of 12% compared with the previous year.

At April’s Assogestioni’s Salone del Risparmio, where Mediolanum was partner of the event, it organised a conference on the future of the banking profession, chaired by Ennio Doris, chairman and founder of the bank and an iconic figure in Italy’s financial industry.

Massimo Doris (pictured), Ennio’s son and chief executive and general manager of the firm, was also present at the Salone with the stated objective of creating recruitment opportunities to grow the bank’s network of financial advisers. At the end of 2012, Mediolanum had a network of 4,315 family bankers, set to increase by about 100 professionals by the end of the year.

Industry scoops

Speaking to InvestmentEurope, Doris confirmed that taking part of the Salone has become a must for industry players. “It’s a shopping window,” he said. “We are here to scoop new industry trends and to see what competitors are presenting. But the event is widely attended by financial advisers, and given we are now at the peak of our recruitment campaign, we hope that the visibility of our stand will help us to attract talented industry professionals.”

According to Doris, most of the new talents will have a banking background. In Italy, about 7% of assets are invested through the banking network, up from 5% last year. However, this share is set to grow further as financial advisers are able to deliver better results and banks are going through a necessary phase of cost-cutting, with a consequent loss of market share.

“They have an obsolete and inadequate distribution network, and they have not been able to cope with the introduction of online banking and technological innovation,” Doris said.

On the contrary, financial advisers are in the best position to profit from this industry change. According to Mediolanum, professionals with experience in a bank can be easily and successfully trained to work as advisers within a bigger network.

“Those are the profiles we are currently recruiting and one of the main reasons we are here. We are looking for head of branches and for people who used to work directly with clients,” he added.

One of the challenges will be to determine the volume of business needed to have success in the market.

“Requirements are becoming higher and higher. Each financial adviser needs to be able to attract higher assets compared with a few years ago,” Doris said.This is confirmed by the fact that Mediolanum’s network has decreased in terms of professionals. At the end 2008, the network had 5,077 professionals.

University training

To make the transition from banking to financial advisory smoother, Mediolanum has recently launched its own university where bankers are trained before they are sent out to clients.

Mediolanum said: “It aims to train professionals to achieve excellence in customer relationship, financial advice and in the management of household assets. On 13 March, the university received the silver award in Paris for ‘Best corporate university embodying the identity, the culture and the brand of the organisation in its stakeholders’ at the Global Council of Corporate Universities.” This is not the only reason why a professional banker could be attracted to a career in Mediolanum.

Doris said: “Since 1982, when we started our business, we have been able to increase assets under management every year [except 2008]. We have been able to demonstrate we can be successful in very different market conditions. Moreover, we do not only offer financial advisory services; we also offer clients credit cards, mortgages and banking services.”

Looking ahead, Mediolanum is investing to develop its technology base to meet increasing demand from ‘digital native’ clients. Doris said: “We were recently awarded by the Italian banking association for having developed an app to pay via smartphone using a photograph. We are now testing payments via a credit card embedded in a smartphone. Technological innovation is well under way. We will be able to see its importance when the industry agrees on common standards.”